How to Save Money Buying a Home
Access to home listings for sale that used to be restricted
to real estate agents has created a prime opportunity for home buyer rebates that could be worth thousands of dollars.
Some real estate agents are now operating on the basis that many home buyers will use the internet
to take a more active role in finding and viewing homes for sale. The time saved by the agent means
they are able to offer a commission rebate to home buyers.
Most people shop for the best value on products or services, and take advantage of
specials or discounts in order to save money. Home buyers can also shop real estate agents in order to save thousands of dollars. Consumer access to the online network of home listings for sale
has created a more competitive market for real estate
agents who are now offering home buyer rebates.
The Multiple Listing Service, or MLS, is a database, or directory of homes that are listed
for sale by real estate agents. When a home is listed for sale in the MLS, the listing provides the
maximum exposure to agents with home buyer clients. Specific property
types and detailed information in the database can be quickly located and matched to the criteria of potential
Because this directory is so comprehensive, it has become a powerful marketing tool. Up to 85% of home buyers first learned about the home they bought through a listing
in the MLS. More homes are sold through the multiple listing service than by any other medium.
Prior to the Internet, access to the MLS database of homes for sale was available only
to licensed real estate agents, and as a result had limited the options available to the traditional listing
and sales approach. Now, with the advent of easy access to this powerful database,
home buyers can choose money saving services compared to the traditional
Home Buyer Rebate
As a result of the change in the real estate industry, there are a growing number of real estate agents
who are offering their services at reduced commission rates. The innovation of rebate real estate services, combined
with easy access to Internet listings and research information, offers home buyers the
opportunity to save money from a commission rebate.
Many real estate agents are now offering
home buyer rebates based on the home sales price, which can be paid, or credited to the costs of the home buyer at the close of escrow.
The following is an example of the potential savings from a
home buyer rebate:
· $400,000 Sales Price
· 3% Traditional Commission to the Buyers Agent =
· 1.5% Rebate to the Home Buyer = $6,000
In a typical real estate transaction, the home buyers agent receives a 3% commission for their services, and would
rebate the agreed portion of the commission to the home buyer when escrow closes. The
home buyer rebate can be applied to the buyer's
down payment or closing costs, or taken as cash, providing there are no lender or state law restrictions, or the amount
of the buyers rebate can be deducted from the final sales price of the home.
Finding a Home to Buy
The primary difference in service when using a rebate real estate agent to buy a home is, that
the buyer would do their own house hunting, instead of the broker pouring over listings, and driving around to
show property. In place of personal meetings, the home buyers agent may provide the necessary information and support, using
the phone, email, or the fax, as the primary contact. In addition to the prospect of receiving a commission rebate,
many buyers may find this method of house hunting to be a very comfortable and convenient way to do business.
The process of house hunting has been simplified now that the MLS listings are available
online. Instead of waiting on real estate agents to provide lists of homes for sale, home buyers can turn on the computer and find
the homes that meet their criteria. A convenient online search
for listings can provide detailed property descriptions and photos. Some listings even offer a virtual tour, which
is a 360-degree online video presentation showing the room interiors. Homes that match the buyer's desired features
can be researched, mapped, and printed out for reference.
In addition to homes for sale, buyers can also find helpful research information, which provide details of various places to live, including: the costs of living,
crime statistics, education, economy, health and climate. A cost of living feature can compare two cities in various
categories such as, taxes, housing, food, and other costs. A salary calculator can project what a buyer's salary
should be to maintain the same standard of living for a different location.
The home buyer rebate may apply to some new home developments, depending on the builder's
policy for cooperating with brokers. Before visiting the model homes, or the sales office, the buyer can call the
builder and ask if they work with real estate agents, or if they offer a broker co-op. If the builder does, they
will probably require the home buyers agent to be with them on their first visit. The agent may be able to accommodate
a meeting with the buyer at the sales office to satisfy the builder's requirement.
Viewing Homes for Sale
The procedure for viewing homes can vary depending on the policy of the
home buyers agent. A common
way is for the buyer to call the listing agent to schedule an appointment, and let them know that they have an
agent, but they are not available to show the home. The listing agent should not object to showing the home
to a potential buyer, since they are paid a commission to sell the home.
Other rebate real estate agents may offer to schedule appointments for the buyer, or perhaps even meet the
buyer at the property. The buyer will need to consider their comfort level for scheduling their own showing appointments
when they are choosing an agent, and discuss the procedure.
Each listing in the online database should provide the contact information for the listing
agent in order to schedule an appointment to view the property. If the listing does not provide the property address,
the home buyer can contact the listing agent, or their real estate agent for the information.
If you don't have an agent offering a home buyer rebate, another option is to ask the
listing agent if they will rebate a percentage of their selling commission if
they were to also represent you as the buyer's agent. Most agents should be willing to work with you since they would be earning a
sales commission, in addition to the listing commission that the seller pays them.
The rest of the home buying process should be mostly standard procedure, such
as, having your real estate agent submit offers, negotiate terms, provide required
disclosures, guidance, and support.